Reduce HCL Technologies, target price Rs 1,390: ICICI Securities
has a
reduce call
on
HCL Technologies
with a target price of Rs 1390. The current market price of
HCL Technologies
is Rs 1586.9. HCL Technologies, incorporated in 1991, is a Large Cap company with a market cap of Rs 430577.24 crore, operating in the IT Software sector.
HCL Technologies' key products/revenue segments include Software Development Charges and Computer Hardware & Software for the year ending 31-Mar-2024.
Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 30695.00 crore, up 1.08% from last quarter Total Income of Rs 30367 crore and up 6.16% from last year same quarter Total Income of Rs 28915.00 crore. The company has reported net profit after tax of Rs 4309. crore in the latest quarter.
The company's top management includes Mr.Shiv Nadar, Ms.Bhavani Balasubramanian, Mr.R Srinivasan, Ms.Vanitha Narayanan, Mr.Simon John England, Dr.Mohan Chellappa, Mr.Deepak Kapoor, Ms.Nishi Vasudeva, Mr.Thomas Sieber, Mr.Subramanian Madhavan, Dr.Sosale Shankara Sastry, Ms.Robin Ann Abrams, Mr.Shikhar Malhotra, Mr.C Vijayakumar, Ms.Roshni Nadar Malhotra, Ms.Lee Fang Chew. The company has B S R & Co. LLP as its auditors. As on 31-03-2025, the company has a total of 271 crore shares outstanding.
Investment Rationale
HCL Technology's FY26 revenue organic guidance of 1?4% YoY CC appears optimistic at its upper end, implying -0.6% to 0.9% organic CQGR. It is supported by an exit growth rate of 1.6%. Management mentioned that it did not see any project deferral or ramp-down due to tariff-related uncertainties in Q4FY25. However, it expects weakness in retail and manufacturing along with an adverse spillover to other verticals amid macro weakness. Q4 deal TCV was strong, at USD 2.995bn, up 43%/30.8% QoQ/YoY. The pipeline too is strong; however, heightened uncertainty persists in deal conversion. ICICI Securities cut its FY26E/FY27E EPS by 2%/2.4%, on the basis of lower revenue estimates. They value HCL Technologies on an SoTP basis ? services (IT and ER&D) at 20x and products at 18x on Q4FY26E?Q3FY27E EPS. The target price stands at Rs 1,390. The brokerage has retained REDUCE call.
Promoter/FII Holdings
Promoters held 60.81 per cent stake in the company as of 31-Mar-2025, while FIIs owned 19.15 per cent, DIIs 15.39 per cent.
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